NMFN: Life Insurance Service Center - Early Payment Benefit

When someone you love becomes terminally ill, the bills can begin to mount quickly. Northwestern Mutual's Early Payment Benefit is an accelerated death benefit* designed to help people with the financial burden associated with terminal illness. It is available to any person insured by a life insurance policy whose doctors certify that he or she is not expected to live longer than six months.

Note: The benefit is not available in Connecticut, Illinois, Indiana, Massachusetts, New Jersey, New York, Vermont, Texas, South Carolina, or Pennsylvania.

How to Qualify
You qualify for the Early Payment Benefit if:

Your policy has a death benefit of at least $100,001 and was issued after Dec. 31, 1991.

Your policy(ies) have a combined value of more than $50,000 in total death benefit coverage and were issued before Jan. 1, 1992.

Benefit Limit
The Early Payment Benefit pays up to 50% of the death benefit up to a total of $250,000 for all policies held. The minimum benefit paid is $10,000.

How to Apply
Northwestern Mutual administers the benefit at the policyowner's request. You must complete the Early Payment Benefit form. We will need medical information confirming that the person insured has less than six months to live.

The Early Payment Benefit is considered a lien against the policy. Once the benefit is taken, it accrues interest at the market interest rate. Any unpaid interest will be added to the lien at the market interest rate. The market interest rate is subject to change January 1 of each year.

When the insured person dies, the beneficiaries will receive any remaining death benefit. This will be the "net" amount after the Early Payment Benefit and interest have been deducted.

The Internal Revenue Code, as amended by the Health Insurance Portability and Accountability Act of 1996, provides that qualified accelerated death benefits are treated as tax-free death benefits and the addition of a qualified accelerated death benefit to a life insurance contract is not treated as an exchange or material change for tax purposes.